There is always a way around legislation – especially when there are billions
of dollars at stake

Every banker worth their salt has two mobile phones: the one whose number is printed on their business card, and the one they actually use.

If bankers want to talk candidly to each other, it is either over these personal mobiles, or in person.

When a journalist wants to discuss a deal in the offing, they know better than to dial the banker’s official number: it would be easier to dial the press office directly. But get the same person on their private number, and they are liable to sing.

Wall Street is fuelled by a network of private mobiles that don’t exist on banks’ books.

Some institutions try to police this underground communication by demanding access to employees’ personal handsets. However, it is impossible to keep up with. Many of the numbers that count are for pay-as-you-go handsets, bought anonymously, so that not even telecoms companies can trace to whom they belong.

This may all seem a little furtive but, fig-leaf surveillance aside, banks implicitly endorse this offline behaviour. JP Morgan, freshly stung by $13bn (£8bn) of fines for bad behaviour, has warned traders to be “vigilant” about what they say through official channels. Deutsche Bank has gone a step further, and banned certain traders from any sort of online chat. They are afraid of bankers making false brags, certainly. But they are also afraid of incriminating evidence.

A clampdown on online chats won’t stop traders talking, of course. It will just move it to a new platform or, more likely, the bar, where it is harder to detect and easier to get away with. There is always a way around these things – especially when there are billions of dollars at stake.

The same is likely to happen with the Volcker Rule, which was finally endorsed on Tuesday, after a painful two-and-a-half-year gestation. The controversial piece of legislation, hailed as the cornerstone of America’s financial reform under Dodd Frank, will ban banks from gambling their own funds for profit.

Institutions will still be able to invest their own funds for “market-making” purposes – that is, to shore up shares which their customers are likely to want in the future – but they are not allowed to play the markets for themselves.

America’s regulators have done a bang-up job of balancing the requirement for banks to make money, with an effort to ratchet down the riskiness of the system. They have also made a valiant effort, in more than 1,000 pages of taut legalese, of preventing bankers from using the market-making loophole as a cover for bad behaviour. They cannot buy into market-making stocks unless there is a history of demand, and pay must be structured so that traders are not incentivised to game the system.

But still, there is a glittering, money-making loophole there. And a certain portion of bankers who are unlikely to resist it.

For my money, I would bet that it is only a matter of time before they navigate a way around, and use market-making as a cover for proprietary trading. The Volcker Rule will not abolish bad behaviour.

It can only make it easier to hold the culprits to account.

Business titans saddle up for a unique meeting

Forget the golf course. For a certain coterie of American power players, deals are done in the stable. Every year, while most of the country is still working through their leftover turkey, these business titans head to sunny Florida and get ready to saddle up.

Or, more accurately, they get ready to watch their daughters saddle up. The village of Wellington, which hails itself, rather cloyingly, as “one of the most successfully crafted communities in Palm Beach County”, is also the centre of America’s elite horse-riding scene.

Here, the daughters of the country’s wealthiest businessmen learn to play polo and showjump – often with considerable success. Bill Gates’s 16-year-old daughter is tipped for the American Olympic team. Michael Bloomberg’s 30-year-old daughter, Georgina, has used her equestrian education at Wellington to turn pro. The daughters of Bruce Springsteen, the musician, and David Kenny, chief executive of America’s The Weather Company, are also serious competitors.

Meanwhile, John Malone, the billionaire chief of cable empire Liberty Global, has found another route in: he is engaged from the sidelines, buying up an enormous horse farm on the outskirts of town to house his growing stable of racehorses.

While the society in Wellington is perennially chichi, the highest-rollers roll up in January, when the polo season and the Winter Equestrian Festival get under way. As the riders plot their best way around the cross-country course, their fathers and sponsors plot deals. Sometimes they are for thoroughbreds. Just as often for companies and property.

This year, discussions should be particularly interesting. Mr Bloomberg has just stepped down as the mayor of New York, and Microsoft, the company Bill Gates founded, is in search of a new chief executive. The Weather Company’s backers are ready to exit, and Mr Malone is on a buying spree. The festival’s official prize fund might run to $7m. But as America’s rich and powerful cheer on the competitors, there is actually much more at stake.

Househunters aren't saying "yahoo!" over prices

There is no topic of conversation so beloved in New York as the size and cost of apartments. It is easy to see why: they are eye-wateringly expensive. But Manhattan is close to losing its crown as the most expensive place to live in America.

Over in San Francisco, the technology boom has caused property prices to skyrocket faster than in any other US city. The new generation of tech entrepreneurs may spend their working lives in low-rise offices across Silicon Valley, but they want to commute from this famously bohemian enclave, known for its excellent food and lively music scene.

Last year, as America’s housing market edged out of the doldrums, property prices in San Francisco jumped by nearly a quarter. The city has the strongest rent control laws in all of California, but the average monthly payment now tops $3,150.

While a few real estate moguls cash in, many people are unhappy. Evictions are at a record high because landlords want to sell. Businesses such as Twitter have been successful in changing planning laws, so that even tiny properties (220 sq ft!) can be turned into living spaces. West coast newspapers run editorials about the advantages of living with just a bed and a chair. Who are they kidding? There are not many who relish the prospect of life in a shoebox.

Last week, the anger of San Francisco’s non-tech contingent bubbled over. Protesters took to the streets and blocked one of the buses that Google uses to ferry its workers from the city. The vehicle eventually made its way through, and crawled onwards to the company’s Mountain View campus. But this problem isn’t going away, and neither are the protests. It’s time for technology’s finest minds to apply themselves to the problem of commuting.